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Newsweek
21-05-2025
- Business
- Newsweek
Student Loan Borrowers Could Wait 2 Years to Get Applications Approved
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Student loan borrowers might have to wait two years to get their repayment plan applications approved as the Department of Education deals with a massive income-driven repayment (IDR) plan backlog. The Education Department previously disclosed that more than 1.98 million IDR applications were pending at the end of April. Only 79,000 requests had been approved or denied during that month. If the Education Department continues to move at this rate, it would take more than two years to process all remaining applications, according to the Student Borrower Protection Center. Why It Matters President Donald Trump's new Education Department this year has so far caused many federal student loan borrowers to see their monthly payments for income-driven repayment programs climb from $500 to $5,000. Roughly 43 million Americans have some sort of student loan debt, and the Education Department reports Americans collectively have $1.5 trillion in student debt nationwide. US Secretary of Education Linda McMahon prepares to testify before a House Subcommittee on Labor, Health and Human Services, Education, and Related Agencies hearing on the budget for the Department of Education, on Capitol Hill... US Secretary of Education Linda McMahon prepares to testify before a House Subcommittee on Labor, Health and Human Services, Education, and Related Agencies hearing on the budget for the Department of Education, on Capitol Hill in Washington, DC on May 21, 2025. More BRENDAN SMIALOWSKI/AFP via Getty Images What To Know Around 2 million federal student loan borrowers are waiting in the backlog to see if their applications for more affordable repayment plans are approved, according to new data from the U.S. Department of Education. In a May 15 court filing, the department showed the extent of how many borrowers are waiting to see if they can get a plan based on their discretionary income. Online applications were reinstated in March by the Trump administration after originally being paused due to a court order blocking Biden's original SAVE (Saving on a Valuable Education) IDR plan. The backlog could create further financial difficulties for borrowers, as nearly 10 million people could default on their loans within months, according to the department. Many have come out against the backlog after Trump implemented several changes in the agency, but the current Department of Education blamed former president Joe Biden's administration, saying it "failed to process income-driven repayment applications for borrowers, artificially masking rising delinquency and default rates and promising illegal student loan forgiveness to win points with voters." "The Trump Administration is actively working with federal student loan servicers and hopes to clear the Biden backlog over the next few months," a spokesperson said, as reported by CNBC. As SAVE was being challenged by the courts, the Biden administration put all student loan borrowers enrolled in SAVE in interest-free forbearance. During the first few months of Trump's second term, he cut roughly half of the Education Department's staff, which may have contributed to the backlog. Newsweek reached out to the Department of Education for comment via email. What People Are Saying Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "What was meant to make the student loan process more efficient has turned into a nightmare. Nearly two million borrowers who applied for income-driven repayment plans are effectively stuck in limbo while they wait to see if they'll be approved or denied. And with a renewed push to collect payments from borrowers, this backlog is only going to present more headaches for those affected. The hope, obviously, is a new administration can offer some quicker solution than the current procedure." Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: "This affects millions of borrowers now back in repayment, many of whom applied for forgiveness or income-driven repayment caps just to keep their finances afloat. Without that relief, a big chunk of their paycheck could be taken to cover loans; money they need for rent, food, or other bills." What Happens Next If the Education Department continues to process applications at its current rate, it would take more than two years for all borrowers to get a decision, according to the Student Borrower Protection Center. As those applications get delayed or stuck in the system, borrowers may be forced to make tough choices, Thompson said. "Some could fall behind on credit cards or other debts. If this drags on, we could see a domino effect: more defaults, more financial strain, and more pressure on the broader economy... Time is of the essence. If this isn't resolved soon, the consequences could compound quickly."
Yahoo
14-05-2025
- Health
- Yahoo
Lawmakers press Kennedy on mass cuts ahead of future budget
House lawmakers repeatedly pressed US Health and Human Services Secretary Robert F. Kennedy on canceled medical research and mass layoffs during a Wednesday hearing on Trump administration proposals that could lead to even broader cuts. Democrats on the House Appropriations Labor, Health and Human Services, Education, and Related Agencies subcommittee repeatedly asked the secretary to explain cuts this year to health care programs, medical research and staffing before discussing a 2026 budget that would shrink the health agencies further. Kennedy insisted he would spend the funds that Congress appropriated in the 2026 budget according to law. But Democrats on the House Appropriations Committee, including ranking member Steny Hoyer and health subcommittee ranking member Rosa DeLauro were focused on the agency's spending this year, for budgets already authorized. 'We have to really keep a clear line here between a questionable proposal for '26 and what is going on right now against the legislation that we have passed, and that has been signed into law,' DeLauro said. The administration's cancellation of National Institutes of Health grants amounted to $2.7 billion in eliminated research, much higher than previous estimates, according to a report issued by Democrats on the Senate Health, Education, Labor and Pensions Committee this Tuesday. In a post on X on Tuesday, HHS called the report 'unequivocally false' and said it was politically motivated. Kennedy is testifying before the Senate HELP committee on Wednesday afternoon. The secretary defended the funding and job cuts, saying that the slashes so far reduced redundancy and that the proposed 2026 budget would streamline programs further. But he also seemed to distance himself from the eliminations led by the US Department of Government Efficiency and said he had protected certain programs, including HeadStart. 'There were many instances where I said 'That would hurt us,' ' he told the House committee.
CNN
14-05-2025
- Health
- CNN
Lawmakers press Kennedy on mass cuts ahead of future budget
House lawmakers repeatedly pressed US Health and Human Services Secretary Robert F. Kennedy on canceled medical research and mass layoffs during a Wednesday hearing on Trump administration proposals that could lead to even broader cuts. Democrats on the House Appropriations Labor, Health and Human Services, Education, and Related Agencies subcommittee repeatedly asked the secretary to explain cuts this year to health care programs, medical research and staffing before discussing a 2026 budget that would shrink the health agencies further. Kennedy insisted he would spend the funds that Congress appropriated in the 2026 budget according to law. But Democrats on the House Appropriations Committee, including ranking member Steny Hoyer and health subcommittee ranking member Rosa DeLauro were focused on the agency's spending this year, for budgets already authorized. 'We have to really keep a clear line here between a questionable proposal for '26 and what is going on right now against the legislation that we have passed, and that has been signed into law,' DeLauro said. The administration's cancellation of National Institutes of Health grants amounted to $2.7 billion in eliminated research, much higher than previous estimates, according to a report issued by Democrats on the Senate Health, Education, Labor and Pensions Committee this Tuesday. In a post on X on Tuesday, HHS called the report 'unequivocally false' and said it was politically motivated. Kennedy is testifying before the Senate HELP committee on Wednesday afternoon. The secretary defended the funding and job cuts, saying that the slashes so far reduced redundancy and that the proposed 2026 budget would streamline programs further. But he also seemed to distance himself from the eliminations led by the US Department of Government Efficiency and said he had protected certain programs, including HeadStart. 'There were many instances where I said 'That would hurt us,' ' he told the House committee.
CNN
14-05-2025
- Health
- CNN
Lawmakers press Kennedy on mass cuts ahead of future budget
House lawmakers repeatedly pressed US Health and Human Services Secretary Robert F. Kennedy on canceled medical research and mass layoffs during a Wednesday hearing on Trump administration proposals that could lead toeven broader cuts. Democrats on the House Appropriations Labor, Health and Human Services, Education, and Related Agencies subcommittee repeatedly asked the secretary to explain cuts this year to health care programs, medical research and staffing before discussing a 2026 budget that would shrink the health agencies further. Kennedy insisted he would spend the funds that Congress appropriated in the 2026 budget according to law. But Democrats on the House Appropriations Committee, including ranking member Steny Hoyer and health subcommittee ranking member Rosa DeLauro were focused on the agency's spending this year, for budgets already authorized. 'We have to really keep a clear line here between a questionable proposal for '26 and what is going on right now against the legislation that we have passed, and that has been signed into law,' DeLauro said. The administration's cancellation of National Institutes of Health grants amounted to $2.7 billion in eliminated research, much higher than previous estimates, according to a report issued by Democrats on the Senate Health, Education, Labor and Pensions Committee this Tuesday. In a post on X on Tuesday, HHS called the report 'unequivocally false' and said it was politically motivated. Kennedy is testifying before the Senate HELP committee on Wednesday afternoon. The secretary defended the funding and job cuts, saying that the slashes so far reduced redundancy and that the proposed 2026 budget would streamline programs further. But he also seemed to distance himself from the eliminations led by the US Department of Government Efficiency and said he had protected certain programs, including HeadStart. 'There were many instances where I said 'That would hurt us,' ' he told the House committee.
